Minimum Wage Budgeting – Why Billions Are Dreaming
One of the most common questions I hear from Financial Advisors who work for large banks and financial institutions is “How can I turn a wage that’s $5,000 into a wage $22,000?”. This has become aNew York item now.
Minimum Wage Budgetingis the process by which businesses and government agencies try to level the playing field by giving low-wage workers a higher check. 당일 신용대출
I started as an employee at a large bank, where I worked at a number of overtime hours every week. At the end of the year, the bank would give me a 2% cost of living raise (a number which seemed high at the time – but was actually twice as high as my annual salary at the time) and thus show me that I was making it. The part of the cost of living raise that was never explained to me was that after 5 years at my job, I’d had 3 raises, all at a rate of 12%, which equaled a $200 differential. At the end of the day, I managed to make $500/week which is pretty decent coming in at around $22,000/yr.
But at the same time, I saw how business owners and government agencies could damage their bottom line without making things worse. You see, with minimum wage paying jobs, if you’re making $5,000 a week, you could be making over $430,000 a year, or you could be making $42,000 a year – yes that’s over 5,000/yr, and I was a minimum wage employee.
Being raised up to the stars (or whatever your calling it) is never a bad thing if you are getting out of a hole, and setting a new course for your life and career. Minimum Wage Budgeting
If you work for minimum wage and you find yourself in a hole, it’s a lot easier to climb out of it when you have set goals and are doing something to make your life better. Let’s think about taxes for a second though. We pay taxes every day based on what we earn, and the value we put on liquid capital (ie, rainy day funds) like our homes, or stocks and mutual funds. The government gives us tax breaks based on important events like saving our homes, reducing our interest payments on our mortgages, families, etc.
Now let’s talk about how to reduce our taxes even further. The government has beenolve itself with cutting taxes and encouraging businesses to grow. These are things which are happening whether or not you read the news, or listen to the talking heads on TV. You do have information to help you reduce your taxes, and there has never been a better time than now when both corporations and the government are trying to get out of the economic mess we’re in.
A very quick and interesting tendency we’ve seen is the increasing use of tax avoidance. Experts say while there are still inherent flaws in certain legal structures, they are now much more attractive for the wealthy to use (because they don’t have to write off much of their income). These HYIP’s (High Yield Investment Programs) provide high yield investments based on stocks, bonds, & mutual funds which are good for the cash flow of these individuals, but they also provide a nice tax-free investment that you can invest into your retirement account and still get all the tax breaks you’re entitled to. Whether or not this works for you is a matter of a free consultation with a financial planner so to make sure the right strategy is being followed.
Another way to make a simple change in a incremental way is by increasing the weekly amount you pay on your house payments. When you make a $100 payment, don’t take that monthly deduction and throw $5 in a drawer. Take that money and put it towards your house! This is simple and can save you $100, $200, $300, or $400 per year. You can’t put a number on the tax benefit by eliminating the tax deduction on it because it’s all dependent on the financial aspect of the home that you are purchasing (the lot, the UPS, etc), but if there’s any way you can put more money in the overall value of the home by putting a larger financial reserve in the house, the tax ” benefit” will be much greater.
It’s also nice to pay yourself every work day. By putting a certain percentage of your paycheck toward investing and savings, you’re not giving Uncle Sam an interest free loan every day. Hard to get that when you’re taking out a loan for your weekly $4.00 Starbucks habit though. Minimum Wage Budgeting
Here’s a great simple action step to stop being broke by increasing your paycheck. Call your employer and ask them to increase your weekly pay from $40 to $50 per week. It’s either that or stop asking for a raise.